In recent years, there has been an increase in international mobility among UHNWI clients. What are the main reasons that lead Swedes to move to Portugal?
Historically, the move to Portugal was primarily driven by retirement. Swedish retirees were attracted by the milder climate, the appealing lifestyle, and a lower cost of living. Beyond these quality-of-life factors, taxation played a significant role. A double tax treaty between Sweden and Portugal offered a fiscal treatment that was especially welcoming for retirees relocating to Portugal.
However, the tax landscape has evolved considerably in recent years. Since 2024, due to changes in the tax regime, the country also attracts new types of populations, with different objectives, needs, and demands.
How does the Portuguese tax regime work for foreign residents? What are its specific features?
Beyond the pension-related advantages, Portugal developed a specific status for foreign residents: the NHR, or Non-Habitual Resident regime. One of its key features was favorable tax treatment. Until 2024, this status was automatically granted to anyone coming to live in the country, regardless of their profession or activity. The only notable downside was that it didn’t cover capital gains tax.
Today, there is a new version called IFICI, commonly referred to as “NHR 2.0”. Under this new regime, obtaining the status is more challenging: it is based on a list of eligible economic activities and qualified job positions considered relevant to the Portuguese economy (e.g. ICT, science, high-level management). In addition to the tax treatment, which remains more advantageous than in other countries, the regime favors entrepreneurs and specific industries.
For those who qualify for the IFICI status, a life insurance policy offers significant added value: it allows them to segregate personal assets from business assets. This provides an important layer of protection, ensuring that the assets intended for the next generation remain separate from the business sphere.
As a result, these entrepreneurs, who often care as much about asset protection as tax deferral (granted by IFICI on foreign assets), can focus on growing their business without worrying about succession: these assets are safeguarded regardless of what happens to the company.
What are the main differences in taxation between Sweden and Portugal?
Sweden and Portugal have two completely different approaches to taxation.
In Sweden, the policyholder pays an annual yield tax, currently approximately 1,065%, based on the value of the policy. The tax base is the value of the policy, plus all premiums paid over the years, and 50% of any premium paid after the first of July. The yield tax is due regardless of performance.
In Portugal, the approach is different. The paid capital—the premiums contributed—is always tax-free upon withdrawal. However, the policyholder will pay tax on the part of the surrender that represents the overall gain of the insurance. The tax rate depends on how long the policy has been in force, meaning that the longer a client holds a policy, the less they pay tax on the gains.
Life insurance can serve as a highly effective planning instrument for entrepreneurs. In certain cases, shares of privately held companies may contribute to a life insurance policy, subject to WEALINS’ approval. This transfer can create a taxable event at the time of contribution, as the assets move from the individual to the policy and are assessed based on their valuation at inception versus their valuation upon entry. However, at the time of exit, because the sale occurs within the policy structure, any capital gains generated from the transaction would not be subject to taxation. It also provides access to asset diversification, as under certain conditions, it is possible to incorporate private equity shares into the life insurance product.
What are the most common challenges when transferring or managing wealth in a cross-border context between Sweden and Portugal? How can WEALINS help meet these expectations?
These are really two very different systems. Moving from one environment to another requires planning ahead in a way that is compliant with both contexts. The policy can be signed in Sweden, and when a client moves to Portugal, the life insurance remains intact with the wealth already wrapped within it.
To make that happen, our experts will ensure that all requirements are met regarding the insurance vehicle, meaning it will comply with and be recognized as a Portuguese life insurance policy in Portugal.
At WEALINS, we have a team dedicated to wealth planning, including wealth planners, tax specialists, legal experts, and financial engineers. They specialize in all our core markets and ensure the policy meets the regulatory requirements from one country to another (or one continent to another), even across several countries over time.
Thanks to portability, our Luxembourg-based life insurance products and our solutions can follow our clients wherever they go, with minimum adaptation, which is particularly relevant for the UHNWI and HNWI clients, who tend to move frequently.
What are the key points to consider when planning your wealth management before moving? When should you start preparing for this transition to ensure it goes smoothly?
Everything must be prepared from the outset to facilitate the transition: there is a predefined list of documents and information we need to process the change of residency and to make sure that the insurance structure is compliant in the target country.
All parties involved—the insurance company, but also anyone taking part in the client’s wealth structuring—need to be aligned and coordinated well in advance. Around six to twelve months before the move is an ideal timeframe.
In addition to its internal expertise, WEALINS has a wide network of private banks, family offices, and tax and legal advisors in each of our core markets. They help us anticipate, build, and deliver long-term, scalable, and cross-border solutions for our partners and their clients.
Have you noticed any changes in the profile of Swedish expatriates in Portugal? What new regulations or tax changes could impact these wealth management strategies in the coming years?
Over the last few years—and even more so since 2024, the average profile has shifted significantly from retirees to entrepreneurs. These new clients are focused on growing their businesses rather than drawing pensions. They are often younger, more active, and they prioritize mobility and flexibility as much as asset protection. Portugal may not be their final destination, which is why the portability of our solutions is so important.
The country is in a transition phase from one tax regime to another. There are still many people benefiting from the former NHR regime, while we are also seeing more and more people establishing companies upon their arrival in Portugal.
While it is still too early for comprehensive statistics, the trend is clear, and WEALINS is prepared to keep helping its partners and their clients navigate complex regulatory landscapes and succeed throughout their lives and journeys.
To learn more about how WEALINS helps future‑proof your clients’ international wealth planning on a daily basis, Connect with our Experts.
